Dive Brief:

• Bark, the parent company of BarkBox, is opening a 201,000-square-foot distribution center in Hebron, Kentucky, to address capacity limitations, Chris Halkyard, the company's vice president of logistics, told Supply Chain Dive in an interview.
• All of Bark's operations are outsourced, and as its business grew, so did the overall volume for its logistics partners. Its new distribution center is also managed by a third party, but Bark has the lease on the facility. The space is designed to ensure Bark has fulfillment capacity available as its partners' networks fill up, Halkyard said.
• As Bark's subscription numbers grow, the volume became "much higher than the original plan we gave our third party," Halkyard said, which led to the decision to open the new facility close to an existing distribution location.

Dive Insight:

Bark is one of the companies that has benefitted from the explosive growth in e-commerce since the early days of the pandemic. It also doesn't hurt that dog adoptions have increased during that time. Bark's main brand, BarkBox, is a monthly subscription box with dog treats and toys.

The new facility in Hebron is managed by OIA Global and joins another Bark facility, also in the Hebron area, that's managed by Pitney Bowes.

"This is all for planning for growth in our fulfillment and our subscription base," Halkyard said.

John Danielson, OIA's warehouse director, said Pitney Bowes has the "lion's share of the work" related to fulfillment, but the new facility acts as a "safety valve for their growth."

As OIA was getting the new facility up and running, it began taking in some of Bark's orders at an existing, multi-tenant location it had in Hebron. Then OIA worked with a consulting firm to design and bring the new location online, Danielson said.

Fulfilling a Bark order requires a facility that can handle a kitting process — which means putting multiple SKUs into a box — while maintaining space for the inventory that goes into the box. The end set up looks a lot like a normal fulfillment center with a bit of a manufacturing process.

"There's multiple automated kitting lines," Halkyard said of the new facility. "So, we're bringing palletized loads of individual components to the end of the line, they're being sent down to flow racks and then the boxes are going down a main line. And then they're putting in whatever those themed items are for those kits." BarkBox's subscription boxes have a theme each month. On Thanksgiving, there might be a turkey toy, while on Halloween, it might be a pumpkin.

Automated kitting doesn't refer to robots filling up boxes, but rather empty boxes heading down a conveyer belt. Humans workers fill the boxes as they move down an assembly line. This process ends with a worker giving the box a barcode, sealing it and adding it to a pallet.

As Bark's business grows, warehousing isn't the only capacity constraint. The business has also run up against tight capacity in the logistics and freight markets.

"There's a massive shortage of equipment, both the United States as well as China on ports," Halkyard said. "And this really creates additional issues because now the carriers are starting to increase prices, additional surcharges, bunker charges, things of that nature."

When e-commerce companies experienced high sales in May and June, they worked to replenish low inventories, which then put a surge on demand for ocean carriers, he said.

Bark works through a non-vessel operating common carrier for its ocean shipping volume, which results in the volume being spread across multiple carriers, he said.

"Nobody really expected the spike and the constricting of the logistics network during the summertime — that's new," he said.